Mitchell Waycaster: Very good. And good morning and thank you for your comments, Michael. Yes, so let’s start with pipelines. So we’re going into this quarter with a pipeline of $142 million. That compares to $122 million start of the first quarter. So we see that up a modest bit as we start the quarter. I would first say that just coming back, and I’ll eventually get to your specific question, but governing both the pipeline and certainly the production is our discipline in pricing. You just heard Jim talk about the results for the quarter and where we see rates coming in but also the funding, both pricing and funding, and then underwriting. Certainly, that’s something we’re very prudent about. You just heard David in an earlier question, you may have not heard he was talking about administration.
And then I would come to demand, but that demand we continue to see and we simply operate in good, vibrant, resilient markets and we continue to serve and grow relationships. And that’s driving what I’m referring to here in both production and pipeline. All of that’s evidenced by the growth that we saw this past quarter, $150 million, roughly 5%, and also on the deposit side. As Jim just mentioned, we had very good funding and deposit growth. The other thing I would say about production, and it’s continued this quarter, the last number of quarters, it’s coming from each of our markets, our regions, our business lines. They continue to contribute in a meaningful way and it’s coming from across the footprint in business lines. As I mentioned, just to give you some percentages, this past quarter we had 13% in Tennessee, 10% in Alabama, Florida Panhandle, 15% in Georgia, Central Florida, 26% in Mississippi.
Mississippi had a very good quarter, this quarter. And then 36% from our commercial corporate business lines. I would say just as important as the geographic distribution and those loan types is the size of credit. We have a very granular asset-based loan portfolio. If you look at the production this quarter of $418 million, 7% of that was in what I would call consumer, whether that be HELOC’s one-to-four family portfolio, which we’ve seen that pull back a touch with mortgage production inventory. But 32% was in small business, business banking, loans under $2.5 million. They’re also deposit-rich, great relationship-type credits. Another 31% in commercial credits greater than $2.5. C&I, David mentioned C&I earlier, but owner-occupied commercial real estate.
And then another 30% to round out the production for this quarter came in our corporate banking groups, some larger C&I commercial real estate, asset-based lending, equipment finance, senior housing. Also, we’ve mentioned Republic Business Credit. Jim mentioned our factoring business. All of that say our average credit’s still around $260,000 or so. So, as you can see, we continue to hit on many different cylinders, evidencing our ability to prudently and continue to produce a very diverse portfolio. But back to your question relative to just looking forward, I would say for this quarter and just looking out to ’24, I would say what the expectation would be to be in line with our past quarters and more in that mid-single-digit-type net. Another variable always is payoffs.
We saw payoffs pull back a little this quarter. That’s going to ebb and flow. So that’ll ultimately play out in the net result that we see quarter-to-quarter.
Michael Rose: Mitch, that’s great. I always appreciate your commentary. It’s very insightful. Just wanted to switch gears to fee income and mortgage, which was a nice upside this quarter with the gain on sale margin jumping higher. I know it’s hard to predict. There’s lots of variations quarter-to-quarter with timing of lock and realization of income. But maybe if you can just walk us through expectations for mortgage revenue and maybe specifically if you can just give us some dynamics on what the profitability of that business looks like, maybe current efficiency ratio in the quarter, things like that? I know the MBA is forecasting an increase in volumes this year. I just wanted to see if you’d expect normal seasonal patterns and if we can expect a little bit better mortgage income as we move through the year? Thanks.
Kevin Chapman: Hey, Michael, Kevin. To kind of answer your last question first, we are anticipating mortgage revenues to continue to hold strong, maybe even pick up as we get into the summer months. I think we’re all very cautious in trying to understand what’s happening in mortgage. Coming out of 2021 and maybe normalizing in ’22, ’23 and even now, it’s hard to say that the normal cyclicality of mortgage is there. Inventory constraints continue to be a headwind in the industry. We actually still see a lot of demand. It’s just limited supply. If you look at some of our trends, you saw the pipeline grow in Q1 compared to Q4. The pipeline currently in Q2 is holding steady. It’s not up slightly, and we recognize that that’s going against the trend that Mortgage Bankers Association is seeing nationwide where maybe applications and sales are flat to kind of pull them back.
We’re optimistic about our mortgage team. We have been opportunistic in some key hiring in Q1 of producers in certain markets. That gives us optimism about higher levels of performance, outperformance in our mortgage space. The division continues to remain profitable. Despite all these headwinds, it does continue to remain profitable. We’ve gone through now 18 months, 24 months of re-looking at the business, restructuring the business. We’ve implemented a new operating platform. We’re on the back end of that now. As well as more of our expense coming from mortgage is becoming more-and-more variable. If you just look at expenses, for example, in Q1 for mortgage, salaries are down $300,000 because of the cost-cutting efforts that were taken in Q4.
